REUTERS/Indonesia appoints auditors for green palm oil body

(Reuters) - Indonesia is forging ahead with its own green palm oil body to regulate and punish firms that do not adhere to environmental standards.

About a dozen independent auditors for the Indonesia Sustainable Palm Oil (ISPO) standard have been appointed, Gamal Nasir, Director-General of Plantation at the Agriculture Ministry, said on Monday.

The auditors will examine the entire operations of palm oil firms as part of the ISPO certification.

Indonesia is the world's largest producer of palm oil that is used in cosmetics, cookies and ice cream but is a major cause of deforestation as demand for the edible oil increases. The industry has come under increasing pressure to improve practices and halt deforestation blamed for speeding up climate change, ruining watersheds and destroying wildlife.

"They (auditors) could start the certification process now because we have appointed them and we also have asked them to do the certification. So, they can do it as soon as possible," Gamal told reporters on the sidelines of a parliamentary meeting.

He said the ministry had also sent a letter of invitation to related government institutions to take part in the ISPO group.

But in a possible sign the initiative could be slow to take off, Gamal said there had been no response from the institutions so far.

"We have decided that although we have not gotten a permanent ISPO Commission, ISPO secretariat and ISPO appraisal team, the auditors still can start the ISPO certification process right now, or early next month, at the latest," he said. "ISPO certification process will take only 1-2 months."

The planned ISPO commission would consist of officials from government institutions and ministries, palm oil associations and NGOs, Gamal had said previously.

The Roundtable on Sustainable Palm Oil (RSPO), comprising planters, green groups and consumers, is the only other major organisation to have set up green standards for the whole industry.

But unlike RSPO, which does not impose sanctions on members who violate its voluntary standards, those found to be breaking ISPO rules will be punished by law, a ministry official said last November.

Earlier this year, the secretary-general of the RSPO described the ISPO as "excellent" and said it would complement the RSPO. .

Some major palm oil consumers such as Unilever (UNc.AS) stopped buying palm oil from Indonesian firm SMART on concerns over deforestation, while an Indonesian moratorium on new permits to clear forests may slow industry expansion. The moratorium came into force in May for an initial two years